Pepsi Brands Benefit From New Marketing Formula

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Pepsi Brands Benefit From New Marketing Formula


PURCHASE, N.Y. -- After a few years of not investing enough in advertising and marketing, PepsiCo is looking to shift its focus and strengthen its brands.

Al Carey, CEO of PepsiCo Americas Beverages, admitted that the company had put an emphasis on building to many brands at once and, as a result, may have spread itself too thin, according to Media Daily News. But the beverage giant is changing tracks this year with efforts to fortify the leading brands -- Pepsi Cola, Gatorade and Mountain Dew. To that end, PepsiCo is planning to increase its overall marketing by 40 percent for the three.

The report added that Carey told investors last week that by overreaching, inadequate investments were made with "some of the biggest brands, so now the focus is on the three" large ones."

"We spread it over too many things, and at one point, I think we had 20 priorities instead of three priorities," he said. "That's something that we really missed on."

A 30-plus-year veteran of PepsiCo, Carey took title to the CEO position in September 2011. He previously served as president and CEO of Frito-Lay North America, where he has led the snack and convenient foods business since June 2006.  

Pepsi has taken several steps to turnaround the brand, including the new "Live For Now" campaign while zeroing in on music and sports themes which are popular with younger consumers, according to Media Daily News. Published reports today indicate that Pepsi is even returning as the sponsor of the Super Bowl halftime show, though there has been no official word.

There is some evidence of early tailwinds, Carey said, citing figures showing that revenues for single-serve offerings for Pepsi are growing for the first time in quite a while, up 4 percent over the first 20 weeks of 2012. Gatorade is up 8 percent and Mountain Dew is up 6 percent.

"What's really important is that we understand what each of the brands stand for and what they don't stand for," Carey explained. "And then what we need to do is put a campaign in place that stays for a while. We continually tell the same message to consumers over and over again, so that it makes an impact on their purchase."

As for the future, Carey said Pepsi will have to be prepared for a change in consumer thirst from colas to flavored carbonated drinks. He added the company is well-positioned for a cola migration, with brands such as Mountain Dew, Gatorade, Lipton, Starbucks and Naked, according to the news outlet.